Slide 1: Investor Presentation November 2011
1 Investor Presentation November 2011
Slide 2: Disclaimer
Disclaimer 2 This presentation does not constitute or form part of and should not be construed as an advertisement of securities, an offer or invitation to sell or issue or the solicitation of an offer to buy or acquire or subscribe for securities of X5 Retail Group N.V. or any of its subsidiaries o
Slide 3: Agenda
Agenda 3 I. Introduction II. Q3 2011 Operational Results & Q3 2011 Financial Results III. 2011 Strategic Priorities and Long-Term Vision
Slide 4: X5 - #1 Russia's Retailer
X5 - #1 Russia’s Retailer 4 Russia’s Leading Food Retailers • X5‟s FY 2010 pro-forma net sales reached USD 13 billion Company FY 2010 Net % % Retail Sales in Top-10 in Total • The Company reported consolidated net sales of (USD mln)(1) Market(2) USD 3.6 billion for Q3 2011 X5 Retail Group(3) 13,079
Slide 5: X5 Multi-Format Approach
X5 Multi-Format Approach 5 X5 Operates Stores for Every Lifestyle and Family Budget As at 30 September 2011 Soft Net selling space: from 300 to 800 sq. m. Discounters Average assortment: 3,000 SKUs Pricing policy: Lowest price in the market on 100% of assortment Value proposition: Price and convenie
Slide 6: Benefits of X5 Multi-Format Strategy
Benefits of X5 Multi-Format Strategy 6 X5’s Multi-Format Approach Enables the Company to: • Appeal to diverse customer segments and regional demographics • Ensure a balance between growth and profitability • Scale efficiencies in purchasing power, IT and supply chain logistics • Respond effectively
Slide 7: Regional Presence
Regional Presence 7 Moscow & Central North-West region As at 30 September 2011, X5: region X5 discounters: 408 X5 discounters: 1,076 • Multi-format presence in 52(1) cities of European X5 supermarkets: 34 X5 supermarkets: 186 Russia, the Urals and Ukraine X5 hypermarkets: 17 X5 hypermarkets: 14 St.
Slide 8: Distribution Infrastructure
Distribution Infrastructure 8 DC locations as at Fruit & Region # of DCs 000 sq. m. Dry Veg Veg. Fresh Frozen Non-Food 30 September 2011(1) Central 12 291.9 v v v v v North -West 5 81.7 v v v v Volgo -Vyatsky 2 29.8 v v v v Urals 4 27.7 v v v v St. Petersburg Centralno- Chernozemny 2 33.7 v v v Psko
Slide 9: Agenda
Agenda 9 I. Introduction II. Q3 2011 Operational Results & Q3 2011 Financial Results III. 2011 Strategic Priorities and Long-Term Vision
Slide 10: Q3 2011 Operational Results
Q3 2011 Operational Results 10 In Q3 2011: Q3 2011 Net Retail Sales(1) • Consolidated net retail sales increased 32% year-on-year in RUR terms RUR billion USD million to RUR 104,979 mln or 39% in USD terms to USD 3,611 mln • Organic sales increased 18% in RUR terms year-on-year while + 39% Kopeyka‟s
Slide 11: Q3 2011 LFL Results
Q3 2011 LFL Results 11 • Soft discounters contributed LFL growth of 3% in Q3 2011 on 4% Supermarkets’ Q3 2011 LFL Performance(1) lower traffic and 7% higher basket. Traffic was negatively affected Based on RUR-denominated across all formats by a slowdown in customer shopping activity Basket Traffic
Slide 12: Q3 2011 Selling Space Expansion
Q3 2011 Selling Space Expansion 12 • In Q3 2011 X5 added a net 102 stores, which includes 114 soft discounters, six supermarkets, two hypermarkets, 11 convenience Selling Area by Format stores and the closure of 31 Kopeyka stores, for a total expansion of 1% net selling space of 37 th. sq. m. 21% So
Slide 13: Q3 2011 P&L Highlights
Q3 2011 P&L Highlights(1) 13 USD mln Q3 2011 Q3 2010 % change y-o-y Net Sales 3,623.0 2,614.0 39% incl. Retail 3,610.7 2,606.6 39% Gross Profit 838.3 629.9 33% Gross Margin, % 23.1% 24.1% SG&A (765.1) (545.9) 40% % of Net Sales 21.1% 20.9% EBITDA 219.8 194.4 13% EBITDA Margin, % 6.1% 7.4% Operating
Slide 14: Q3 2011 Key P&L Developments
Q3 2011 Key P&L Developments(1) 14 Net sales increased 32% year-on-year in RUR terms to RUR 105,340 mln or 39% in USD terms to USD 3,623 mln; Gross profit totaled USD 838 mln, for a gross margin of 23.1%; EBITDA amounted to USD 220 mln, for an EBITDA margin of 6.1%; SG&A expenses as a percen
Slide 15: Q3 2011 Cash Flow Highlights
Q3 2011 Cash Flow Highlights 15 Net Cash from Operations of USD 309 mln in Q3 2011 on Significant Improvement in Working Capital % change USD mln Q3 2011 Q3 2010 y-o-y Net Cash Flows Generated from 308.6 72.8 324% Operating Activities Net Cash from Operating Activities 7% 224.4 210.6 before Changes
Slide 16: Liquidity Update
Liquidity Update 16 • As of the end of September 2011, the Company‟s total debt amounted to USD 3,578 mln (at RUR exchange rate of 31.88), out of which 22% was short-term (USD 771 mln) and 78% long-term (USD 2,807 mln). Ruble-denominated borrowings accounted for 89% of X5 net debt at 30 September, 2
Slide 17: Agenda
Agenda 17 I. Introduction II. Q3 2011 Operational Results & Q3 2011 Financial Results III. 2011 Strategic Priorities and Long-Term Vision
Slide 18: 2011 Strategic Priorities
18 2011 Strategic Priorities Customer Focus on formats‟ value propositions Focus Further assortment improvements: local sourcing, private label, non-food Organic Step-up in new store openings Expansion Special focus on discounters, selective openings of supermarkets and hypermarkets Moscow
Slide 19: 2011 - Healthy Cash Flow
19 2011 - Healthy Cash Flow illustrative(1)(2) Investing Cash Flow - organic Investing Cash Flow - M&A Operating Cash Flow One-off Retail Law effect USD mln 629 734 427 378 (245) (458) (189) (899) (997) (1,090) (659) 2007 2008 2009 2010 2011F-2013F (1) 2011F-2013F cash flows – not according to scale
Slide 20: Long-Term Vision: National Champion in Retail
20 Long-Term Vision • Successful Implementation of Multi-Format Strategy Creating National Retail [Champion] Leader? • Low Cost, Best-in-Class Retail Operations • Moscow and St. Petersburg as Cash Generators Supporting Growth of Regional Operations National Champion in Retail
Slide 21: X5 Share Capital Structure
X5 Share Capital Structure 21 0.11% 32.16% Alfa Group Founders of Pyaterochka X5 Management and/or 0.02% 47.86% Supervisory Board members Free Float 19.85% Treasury Shares Total number of shares – 67,893,218 Equivalent of 271,572,872 GDRs
Slide 22: Contact Information
Contact Information 22 IR Department Contact Details Anastasiya Kvon Andrey Napolnov IR Director Deputy IR Director X5 Retail Group N.V. X5 Retail Group N.V. 28 bldg., 4, Sr. Kalitnikovskaya, 28 bldg., 4, Sr. Kalitnikovskaya, Moscow, Russia Moscow, Russia Tel.: +7 (495) 792 3511 Tel.: +7 (495) 662 8